$1.4 bn tax demand: Prima facie dissatisfied with Skoda Volkswagen's arguments, says Bombay HC
Skoda Auto Volkswagen India's arguments against a USD 1.4 billion notice from the Customs department.
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The HC also commended a department officer for his dedicated efforts and thorough research prior to issuing the notice. «Prima facie, we are not satisfied with your (Skoda Auto Volkswagen India) argument. This is only prima facie,» a division bench of Justices B P Colabawalla and Firdosh Pooniwalla said.
«To entertain such a plea at the stage of show cause notice is something you have to convince us. This is troubling us whether we should entertain the plea at the stage of show cause notice,» it added.
The notice claimed the German group, led in the country by Skoda Auto Volkswagen India, allegedly provided misleading information to the department by misclassifying its imports of Audi, Skoda and Volkswagen cars as «individual parts» instead of «Completely Knocked Down» (CKD) units, thereby paying significantly lower Customs duties.
The CKD units attract a 30-35 per cent duty, but Volkswagen declared its imports as separate components in different shipments and paid only 5-15 per cent in duties, as per the Customs. The department said import of various unassembled parts of cars should have been declared as CKD units.
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